West Valley View Business - March 1, 2017

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west valley

Volume 28 Issue 21 Avondale, AZ

March 1, 2017

Minimum wage, maximum burden’ Proposition 206 hurts West Valley businesses, schools, business owners say byKourtneyBalsan

IN THE BIZ

To raise, or not to raise the minimum wage, that is the question ... That was one of the questions, anyway, on Election Day when Valley voters decided to raise the minimum wage by voting yes on Proposition 206. In 2016, Arizona’s minimum wage was $8.05 an hour, 80 cents more than the federal minimum wage at $7.25. On Jan. 1, Arizona’s minimum wage increased to $10. Gradual increases will raise it to $12 an hour by 2020. Employers who have employees who earn tips can continue paying them up to $3 less than the minimum wage. Tip earners will go from $5.05 an hour to $7 an hour and eventually $9 an hour, plus tips. Proposition 206 not only raised the minimum wage, but also required businesses to provide paid sick time for all employees. Beginning in July, employers are required to provide up to 40 hours of paid sick leave if they have 15 or more employees or 24 hours if they have fewer than 15 employees. Employees will accrue one hour of sick time per every 30 hours worked. “The word that we’ve received by our membership and other businesses is that it’s a great concern,” said John Safin, president and CEO of the Southwest Valley Chamber of Commerce. Because of Proposition 206, West Valley small businesses are going to have to make

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changes to survive, said Deanna Kupcik, president and CEO of the Buckeye Valley Chamber of Commerce. “It affects my members, every one of them, on some level,” Kupcik said. “The cost of doing business is going to go up dramatically and the record-keeping nightmare is going to be a big burden on a small business person to keep track of.” On Dec. 15, 2016, chambers of commerce throughout Arizona, along with various organizations, filed litigation to overturn Proposition 206 because it was not a single-subject initiative as it included paid sick time and because it will increase the amount the state pays companies for contracted services. The court ruled in favor of the proposition. The plaintiffs appealed the ruling and the Arizona Supreme Court agreed to a hearing. “I’m not going to make a prediction, I’d have a better chance predicting lottery numbers,” Safin said. “It’s going to be in the hands of the courts and everyone involved in that litigation.” Raising the minimum wage by $4 gradually and providing required sick leave doesn’t sound like much, but in the scheme of things, it could break local businesses that have given the West Valley its charm, Safin said. Where some may see just a few extra dollars, businesses see thousands. For example, a part-time minimum wage employee who works 25 hours a week made $10,465 in 2016. That same worker will make $13,000 plus a possible $400 for unused sick time in 2017. That worker will make up to $14,070 in 2018, $14,740 in 2019 and $16,080 in 2020. The company will spend an extra $16,430 per employee over the next four years. A company with 15 employees will spend an extra $246,450 in the same time span. “The money has to come from some(USPS 004-616) is published weekly by West Valley View Inc. Mailing Address: 1050 E. Riley Dr.,

Avondale, AZ 85323 (623) 535-VIEW • 535-8439 Elliott Freireich, publisher Cary Hines, editor

where,” Safin said. “Based on the information we received from our membership, there are a lot of businesses who have either raised prices or had to make a change in their hours, and some are still trying to figure out what they want to do.” State Rep. César Chávez, a first-term Democrat from District 29, said Proposition 206 is a solution, not a problem. “First and foremost, it is important that we honor the will of the people,” Chávez said. “Proposition 206 is part of the solution to a panoramic picture that needs to be addressed. We are seeing prices, due to inflation, sky rocket, and the individuals that are struggling to make ends meet have not received any type of wage increments. Prop. 206 provides them with some relief to be able to provide their family a better living lifestyle.” Breaking local businesses A few local businesses have already made changes. A West Valley staple for 35 years, TJ’s Restaurant, 310 N. Dysart Road, Avondale, is one of the first to suffer, part owner Don Holmes said, adding that because the restaurant suffers, its customers suffer, too. “I don’t even know how to say it. I’m just very disappointed,” Holmes said. “When minimum wage goes up, everything goes up. It affects everybody.” The restaurant hung signs at the beginning of the year announcing it would have to reduce weekend hours because of Proposition 206, but later removed them because of the arguments the signs provoked. “So far, I’ve had to cut my staff by four people, I’ve had to terminate them, and we’ve reduced our business hours to save on labor costs,” Holmes said.

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